As California moves forward with plans to expand its controversial Warehouse Indirect Source Rule (ISR) statewide, the Supply Chain Federation is raising alarms. A recent independent analysis has revealed significant shortcomings in the policy, claiming it not only fails to meet emissions targets but also poses serious risks to the economy and the supply chain.
The global consulting firm Ramboll conducted a comprehensive review of the Warehouse Actions and Investments to Reduce Emissions (WAIRE) program, a key component of the ISR enforced by the South Coast Air Quality Management District. Their findings indicate that WAIRE has not achieved any meaningful emissions reductions while also significantly raising costs for warehouses, logistics, and small businesses, all of which ultimately impact consumers.
Tim Jemal, CEO of the Supply Chain Federation, criticized the policy, stating, “This is a textbook case of regulatory overreach with no return. The WAIRE has failed to deliver the environmental benefits it promises. Instead, it threatens jobs, fuels economic uncertainty, and sets a dangerous precedent for California and the nation.”
The Federation cautions that expanding regulations similar to the ISR without data-driven outcomes could disrupt the movement of goods across California, burden national supply chains, and inspire similar regulations in other states, exacerbating economic challenges nationwide.
Key findings from the Ramboll report include:
- No meaningful emissions reductions have been directly linked to WAIRE, according to both Ramboll and the U.S. EPA.
- Existing state regulations, not compliance with ISR, are responsible for emissions improvements.
- Compliance costs have skyrocketed to be 3–9 times higher than initially projected.
- Smaller businesses are disproportionately affected by these rising costs.
- There is a significant risk of job losses and emissions leakage as operations may relocate to less-regulated areas.
In response to these findings, the Supply Chain Federation has formed a National ISR Working Group. This initiative aims to unite industry leaders, environmental experts, and public policy professionals to develop evidence-based strategies that promote clean air solutions without compromising supply chain integrity or economic competitiveness.
“We’re strongly committed to smart environmental stewardship,” Jemal concluded, “but policies must be grounded in real-world results, not bureaucratic ambition. The ISR model in its current form fails that test.”
As California continues to navigate the balance between environmental goals and economic viability, the outcome of these discussions could have significant implications for the future of the state’s economy and its regulatory landscape.
